One of the many huge challenges inherent in planning and executing cross-border restructuring and insolvency assignments is the reality that no two nations anywhere in around the globe have the same business rescue regime.  The differences are never minor, reflecting the major variations in business ethics and legal systems as well as both political and societal priorities.

For decades, insolvency professionals, academics, judges and economists have debated the merits of harmonisation and largely agreed on the benefits it might bring. Nevertheless, they have been frustrated by what seemed to be the sheer impossibility of securing the necessary consensus and the requisite governmental support.

The EU acts

Now, the Council of the European Union has finally approved a new EU Law that aims to bring consistency to five key aspects of insolvency rules across all its Member States. The law came into force on 1 April 2026. The goals of the new measures are to maximise the value which creditors can recover in an insolvency and to increase the efficiency of the insolvency proceedings. The Council has stated that this is an important step towards more efficient and integrated European capital markets, which it believes is crucial to the EU’s competitiveness.

What are the changes?

The law, known officially as Directive 2026/799 of the European Parliament, identifies five ‘pillars’, aspects of which are to be harmonised.

Pillar 1: Avoidance actions

Member States will adopt common rules allowing insolvency practitioners to challenge suspect transactions made shortly before insolvency. The goal is to prevent the illegitimate removal of assets and protect the value of the insolvency estate. The Directive specifies, subject to certain conditions, three sets of voidable transactions:

• ‘Preferences’;
• ‘Transactions for no or manifestly inadequate consideration’; and
• ‘Transactions intentionally detrimental to creditors’

Pillar 2: Pre‑Packs

The law introduces a harmonised framework for pre‑packs, enabling the sale of a distressed business to be negotiated before formal insolvency begins and to be completed shortly after. Crucially, essential contracts can be preserved to support business continuity.

Pillar 3: Duties to file for insolvency

Directors will be required to file for insolvency within three months of the commencement of financial distress, unless alternative measures offer equal protection for creditors. The aim is to encourage early action and prevent value erosion through unjustified delay.

Pillar 4: Stronger creditor involvement

The Directive enhances the role of creditors’ committees, giving individual creditors a clearer voice and more structured involvement in proceedings.

Pillar 5: Asset tracing

The ability to identify and trace assets belonging to an insolvency estate is central to effective cross-border recoveries. If the insolvency officeholder requests this, subject to certain conditions, designated courts or administrative authorities will obtain direct access for them to the following data and information across the EU:

• bank account information, using BARIS to access foreign registers;
• beneficial ownership data, including the beneficial owner’s name, date of birth, country of residence and nationality and extent of beneficial interest held; and
• national asset registers, such as for real estate or share records.

This cross‑border visibility should make it easier to identify and recover assets, which might otherwise slip through the cracks.

How will the Directive be implemented?

Member States have until 22 January 2029 to transpose the majority of its provisions into national law. Until an EU member does so, the Directive’s provisions will not apply in that jurisdiction.

Greater transparency of insolvency laws

Every Member State will be obliged to publish accessible factsheets explaining its insolvency laws. These will be available on the EU’s e‑Justice portal, helping businesses and insolvency professionals to navigate national systems with far greater clarity.

A step towards greater insolvency harmonisation

The new EU framework won’t eliminate all differences between Member States, but it represents a significant and meaningful step toward a more coherent and efficient European insolvency landscape. Some jurisdictions already have laws in place, that meet the requirements of the Directive, but for those that don’t or where existing rules need to be brought into line, Member States have a little under three years to make the necessary changes.

If you are seeking professional advice for your business, Opus is here to help. We can arrange for you to speak to one of our Partners, who can discuss options with you. We have offices nationwide and by contacting us on 0203 995 6380, you will be able to get immediate assistance from our Partner-led team.